The link from deflation to output collapse remains an open puzzle: while prices fell ~30%, why output fell 20-30% is not fully established, though the contrast with Spain (no big deflation, flat or rising industrial production) shows a clear link, with candidate mechanisms being nominal rigidities and credit-system disintermediation (per Bernanke's work).
factualpending
Speaker
Douglas IrwinEvidence Quote
“just because prices fell by 30%, why does output fall by 20 or 30%? And that's still... there's fruitful work to be done in sort of establishing that link.”
Created: 6/15/2026, 9:36:56 AM
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